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  "notes": "The slide includes a diagram labeled 'Figure 8.1. Risk management system' showing a funnel with Return, Liquidity, and Risk.",
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      "text": "Market participants typically say that an optimal diversification or asset allocation strategy, combined with active and highly flexible portfolio-management, are the cornerstones of a solid risk management process.",
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      "text": "Cost-efficiencies are a critical part of setting up a family office\nImplement an automated risk management process to materially improve the cost structure\nReduce cost of control spend through improved use of automated controls\nStreamline or eliminate duplicative risk activities\nImprove process efficiency through continuous monitoring",
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      "text": "Identify which factors could destabilize your portfolio and affect your diversification\nCapture \"blind spots\" and \"hidden\" diversification risks\nAvoid the case of seemingly uncorrelated assets moving in the same direction during corrections\nFocus on \"imperfect\" knowledge\nInitiate critical analysis and reflections of potential impact on asset allocation decisions",
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      "text": "Identify and address key risk areas that matter\nEffectively assess risks across the family office, driving accountability and ownership\nManage and mitigate mission-critical risks\nEstablish comprehensive risk frameworks",
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      "text": "are more often combined with short- to mid-term investments with a significantly higher risk profile to achieve outperformance. As part of this process, a further professionalization of family office services is taking place in processes such as manager selection and due diligence of direct investments, or a more stringent controlling of portfolio managers.",
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      "text": "Risk, return and liquidity are the foremost issues to be considered in any investment decision and asset allocation process (see Figure 8.1). These prerequisites will be the basis for the risk management system, which in itself will cover risk mitigation and cost reduction and may lead to value creation. These factors include:",
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      "text": "Consequently, risk management and investment reporting and controlling have gained importance following the financial crisis. Market participants typically say that an optimal diversification or asset allocation strategy, combined with active and highly flexible portfolio-management, are the cornerstones of a solid risk management process.",
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      "text": "Systemic and global risks clearly impact family wealth in a significant way. The following parameters provide the core of a portfolio risk analysis framework:2",
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